Kaufmann v. Prudential Insurance Co. of America
840 F. Supp. 2d 495
D.N.H.2012Background
- ERISA requires exhausting administrative remedies before suit, but the issue is whether an SPD-only appeal procedure not in the plan’s written instrument can be enforced.
- Kaufmann, employed at Goss, received STD then LTD benefits; Prudential terminated LTD on Feb 23, 2006 and advised a 180-day appeal window.
- Kaufmann’s attorney indicated an appeal would be forthcoming in Aug 2006, but the appeal was not filed until Feb 17, 2009, well after the deadline.
- The Plan’s written instrument does not require exhaustion; it allows lawsuits 60 days after proof of claim and up to 3 years, with no explicit administrative appeal requirement.
- The SPD states appeal procedures and is explicitly not part of the Plan; Amara and related authorities hold the SPD terms are not Plan terms and cannot amend the Plan.
- Court holds the SPD’s 180-day appeal deadline cannot be enforced because it is not in the Plan’s written instrument; Kaufmann did not fail to exhaust under the Plan.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are SPD-based appeal procedures enforceable when not in the Plan's written instrument? | SPD terms are not part of the Plan, so they cannot create enforceable exhaustion requirements. | SPD provisions can impose appeal rights and timeframes even if not in the written instrument. | SPD appeal provisions cannot amend the Plan; no enforceable exhaustion based on SPD alone. |
| Does ERISA require exhaustion when the Plan’s written instrument lacks a procedure for appeals? | Without a written appeal procedure, there is no exhaustion requirement. | The Plan may be construed to require exhaustion; the SPD attempts to supply those procedures. | Exhaustion is not satisfied by SPD provisions; the Plan’s written instrument governs. |
| Does the SPD’s inclusion of appeal procedures conflict with Amara and related authorities? | Amara supports treating SPD as non-binding on the Plan terms, so SPD provisions cannot bind. | Amara permits SPD communication, but does not address reliance on SPD, which is not supported here. | Amara forecloses treating SPD terms as Plan terms; SPD cannot establish mandatory appeal rights not in the written instrument. |
Key Cases Cited
- Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73 (1995) (written-plan terms and rights must be in the instrument establishing the plan)
- Amara v. Cigna Corp., 131 S. Ct. 1866 (2011) (SPD terms are communications, not the plan’s terms; cannot amend the plan without written instrument)
- Schwartz v. Prudential Ins. Co. of Am., 450 F.3d 697 (7th Cir. 2006) (SPD language granting discretionary authority cannot substitute for plan terms)
- Bachelder v. Communications Satellite Corp., 837 F.2d 519 (1st Cir. 1988) (reliance on SPD vs. plan distinctions informs exhaustion arguments)
- Morales-Alejandro v. Medical Card Sys., Inc., 486 F.3d 693 (1st Cir. 2007) (reliance principles related to SPD vs. plan terms)